KRS 355.3-203: Transfer of instrument -- Rights acquired by transfer.

(1) An instrument is transferred when it is delivered by a person other than its issuer for

the purpose of giving to the person receiving delivery the right to enforce the

instrument.

(2) Transfer of an instrument, whether or not the transfer is a negotiation, vests in the

transferee any right of the transferor to enforce the instrument, including any right

as a holder in due course, but the transferee cannot acquire rights of a holder in due

course by a transfer, directly or indirectly, from a holder in due co urse if the

transferee engaged in fraud or illegality affecting the instrument.

(3) Unless otherwise agreed, if an instrument is transferred for value and the transferee

does not become a holder because of lack of indorsement by the transferor, the

transferee has a specifically enforceable right to the unqualified indorsement of the

transferor, but negotiation of the instrument does not occur until the indorsement is

made.

(4) If a transferor purports to transfer less than the entire instrument, negotiation of the

instrument does not occur. The transferee obtains no rights under this article and has

only the rights of a partial assignee.